The Cable sector as well as the entire Telecommunications industry has been expending a large amount of resources to sell bundled products and services. This means that instead of just offering Analog and Digital Cable Services, Cable and Telecommunication Companies are offering Cable, High Speed Internet, Digital Telephone, Digital Video Recorders, High Definition TV, etc. in a "Bundled" product.
The sale of a bundled products and services is easier for a customer requiring fewer mouse clicks and faster checkouts and a single monthly bill. The benefit to the Cable and Telecommunications companies is that is greatly enhances customer retention, revenue and market penetration as can be evidenced by this article.
Cox Communications Announces First Quarter Financial Results for 2005
Previous Posts on Consulting in the Cable and Wireless Sectors:
Part 1: Consulting in the Cable and Wireless Sectors
Part 1...Commerce Solutions:
The Cable and Wireless sectors are unique. Over the last several years I have done considerable consulting in these sectors. Most recently I have lead the design and architecture of a Channel Sales System that now has 65% of a Web presence for one of the larger companies in the cable sector. Much of the remaining 35% will convert and/or continue to leverage web services of this same system. We are also using this system for Interactive TV and Telephony. It is a blast.
Prior to building this system and during the course of building this system, we evaluated a number of packaged commerce solutions. Many/most of these packaged "commerce" software rarely meets the needs of a cable company. That is why "Build" instead of "Buy" became such a strong consideration. Vendors often state that a Cable Company is not in the business of bulding software. True, but cable (and wireless companies) are in very competitive sectors and it is absolutely crucial that they control their own destiny. So, although a cable company is not in the business of writing software; it is in charge of remaining competitive. Some cable companies have gone down the vendor path only to do an about face.
The issue is that being beholden to a vendor can really cost the company time to market....and Time-To-Market is crucial...and a driving factor for many businesses...not cost.. For example, let's say that a vendor is 6-12 monthis behind the curve; or the vendor panders to many industries instead of just Cable. This means that it is very difficult for a company to react quickly to changing market conditions. Nothing kills a marketing campaign such as a commerce solution that does not meet the needs of the business. Or that it does but with considerable customization. Furthermore, if you customize vendor software, you further exasperate the probem...because you will still have to upgrade and customizations typically have to be reapplied to an upgrade....it is a vicious cycle....one that some vendors enjoy because it leads to continued consulting service sales.
Typically packaged commerce solutions either:
a) Handle the marketing/sales well but do not handle fulfillment/billing elegantly...(e.g. bundling is big in these sectors but not all vendors really handle this well).
b) Handle the fulfillment/billing farely well but rarely handle the marketing/sales.
c) Deployment. Vendors rarely take into account what it takes to get software deployed across a large organization. For example, Microsoft and PUP files....argggg...what a mess. This is exasperated by the fact that many large companies are maintaining many environments.....Development, QA, User Acceptance Testing, Preview, Staging, Production....to name a few. Any pain points with deployment are therefore magnified.
d) Cable and wireless companies are really a service company with some product. They are shipping bits/bytes along with some equipment and professional services (installation and maintenance). Furthermore products and services are intertwined. This means that the typical "Amazon" sales metaphor really does not hold.
e) Cable companies are made up of numerous business units, often called franchises...they can almost be thought of as separate companies. They are typically selling the same basic products and services but with a twist (e.g. different movie channels...different bundles of service). They also must be able to react quickly to local competitive market conditions. The key here is that they are selling the same basic products and services....but they are marketed differently. So many vendors say....Hey just create another catalog item!. Huhhh. This means that if you are going to have a common commerce solution, you are going to have many dimensions to your data and/or multiple implementations....possibly down to the household. This also means that maintaining 50 different catalogs is not the answer as some vendors suggest and some companies implement. A company must be able to maintain their data. The more catalogs you have the more data you have to maintain.
I hope to continue with further discussions and rants about consulting in the Cable and Wireless Sectors....